The Five Most Expensive Cities In The World

To buy a 970-square-foot apartment in Hong Kong, Mumbai, Beijing or Shanghai would take more than 30 years for a household with a median income, according to a recent report by Oxford Economics which looked at price-to-income ratios around the globe.

Here are five most expensive real estate markets in the world--only one of which isn't in Asia.

London's property prices are severely unaffordable to most residents after decades of growth. Since 2013, London's property prices have increased at a double-digit rate every year. Average home prices in the city have gone from £257,000 in 2006 to £474,000 in 2016, an 84% increase.

Government efforts to cool the housing market through high stamp-duty rates for luxury properties and new stamp-duty rates for investment properties have failed to make much impact. But a recent survey of economists suggests London property prices could finally flatline or drop this year.

4. Shanghai

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One of China's hottest property markets, Shanghai's real estate prices rose as much as 40% last year and were up 5% a single month last August. Housing prices have been difficult to clamp down on. Spooked by a weak domestic stock market in 2015, many investors poured into the property sector, seeing it as one of the few options left for favorable returns.

Prices could come under pressure soon though as regulators have put forth new efforts to keep prices down, or at least steady. In October, more than 20 Chinese cities, including Shanghai, introduced new measures to cool the housing market by implementing purchase limits and tightening mortgage restrictions.

3. Beijing

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The most expensive housing market in mainland China, the average home price in Beijing is now $5,820 per square meter, according to the Municipal Commission of Housing and Urban-Rural Development. In September, average home prices in Beijing rose nearly 30% year on year. By comparison, prices in China's major cities rose about 11%.

Measures introduced in October may clamp down on skyrocketing prices but there's a risk to allowing prices to fall precipitously. Investors have come to expect double digit returns and much of domestic household wealth is tied up in real estate.

2. Mumbai

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Located on a narrow peninsula, Mumbai is now home to some of the world's most expensive real estate. As Quartz notes, Mumbai's house price-to-monthly income ratio "is the highest among major Indian cities." And as the country accumulates wealth, developers have been struggling to find building sites in the crowded city where millions still live in densely-packed slums.

Housing came under pressure in November when the Indian Prime Minister, Narendra Modi, overhauled the country's currency and took 500 and 1,000 rupee bills out of circulation in an effort to root out corruption, counterfeiting and tax fraud. Much of India's real estate transactions are done in cash to avoid taxes. PropEquity, a data provider, expects property prices in Mumbai could drop by 30% this year.

1. Hong Kong

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Holding on to its rank as the most expensive housing market in the world for the seventh year in a row is Hong Kong. The median home price was 18.1 times the median annual pretax household income last year, according to a recent annual report from Demographia. Though a small improvement from the year before when home prices were 19 median household income, Hong Kong still ranks as "severely unaffordable" the report said.

The city's housing prices have skyrocketed in recent years, driven by low interest rates and mainland Chinese buyers. Lack of affordable housing has become a top social issue as the city's poor crowd into "cage homes" and dangerous, subdivided apartments.